Thursday, October 12, 2017

How Odysseus Started The Industrial Revolution

Factory work may have been a commitment device to get everyone to work
hard. Odysseus tying himself to the mast was also a commitment device.
Dean Karlan, Yale economics professor explains how commitment devices
work:

"This idea of forcing one’s own future behavior dates back in our culture at least to Odysseus, who had his crew tie him to the ship’s mast so he wouldn’t be tempted by the sirens; and Cortes, who burned his ships to show his army that there would be no going back.

Economists call this method of pushing your future self into some
behavior a “commitment device.” [Related: a Freakonomics podcast on the
topic is called "Save Me From Myself."] From my WSJ op-ed:

Most of us don’t have crews and soldiers at our disposal,
but many people still find ways to influence their future selves. Some
compulsive shoppers will freeze their credit cards in blocks of ice to
make sure they can’t get at them too readily when tempted. Some who are
particularly prone to the siren song of their pillows in the morning
place their alarm clock far from their bed, on the other side of the
room, forcing their future self out of bed to shut it off. When MIT
graduate student Guri Nanda developed an alarm clock, Clocky, that rolls off a night stand and hides when it goes off, the market beat a path to her door."

Something like this came up recently in the New York Times, in reference to factory work and the Industrial Revolution. See Looking at Productivity as a State of Mind. From the NY Times, 9-27. By SENDHIL MULLAINATHAN, a professor of economics at Harvard. Excerpts:

"Greg Clark, a professor of economics at the University of California, Davis, has gone so far
as to argue that the Industrial Revolution was in part a self-control
revolution. Many economists, beginning with Adam Smith, have argued that
factories — an important innovation of the Industrial Revolution —
blossomed because they allowed workers to specialize and be more
productive.

Professor Clark argues that work rules truly differentiated the factory.
People working at home could start and finish when they wanted, a very
appealing sort of flexibility, but it had a major drawback, he said.
People ended up doing less work that way.

Factories imposed discipline. They enforced strict work hours. There
were rules for when you could go home and for when you had to show up at
the beginning of your shift. If you arrived late you could be locked
out for the day. For workers being paid piece rates, this certainly got
them up and at work on time. You can even see something similar with the
assembly line. Those operations dictate a certain pace of work. Like a
running partner, an assembly line enforces a certain speed.

As Professor Clark provocatively puts it: “Workers effectively hired
capitalists to make them work harder. They lacked the self-control to
achieve higher earnings on their own.”

The data entry workers in our study, centuries later, might have agreed
with that statement. In fact, 73 percent of them did agree to this
statement: “It would be good if there were rules against being absent
because it would help me come to work more often.”"

The workers, like Odyssues, tied themselves to the mast to resist the
temptation of slacking. This made it possible for factories to generate
the large output of the Industrial Revolution.